Are you buying a home located inside a community with rules? Or are you planning to run for the board of your homeowners association soon? While many new homeowners and board members use these terms interchangeably, there are key differences between the single-family homeowners association and multi-family condominium association structures. From property values to insurance coverage to what you are responsible for daily, it’s crucial to know how condominium associations vs HOA operations work.
Both community associations implement rules and regulations for their residents to follow, as well as collect dues to pay for maintenance and landscaping of common grounds. However, when it comes to legal definitions, boundaries of real estate ownership, and daily responsibilities, they differ. Let’s take a closer look at each of these two popular community association structures to clearly identify their differences.
What Is a Homeowners Association (HOA)? Single Family vs Condo Associations
A homeowners association, also known as an HOA, is a planned community that consists of individual single-family homes. A homeowners association is responsible for maintaining any shared land outside of individual homes, such as parks, clubhouses, and pool areas. Individual homeowners who own property inside an HOA own the land that their home is sitting on as well as the physical structure. When you own a home inside of an HOA, you own your home lot, the physical house, the roof, foundation, and lawn.
HOAs are responsible for preserving neighborhood beauty and managing common areas within the community. The homeowners association itself owns the private streets, community gate entrances, parks, pools, and other green spaces.
What Is a Condominium Association?
Condo owners own their units, but they do not own the physical building and land that their unit is on. Condo owners own the inside of their condo, including the interior walls, floors, ceilings, and furniture. However, the physical building, roof, foundation, outdoor walls, hallways, elevators, HVAC, and parking are shared with all other owners in the complex.
A condominium association is made up of multi-family dwellings where condo owners own the inside of their unit. However, they also own a shared interest in the physical building itself.
Condo owners are responsible for the interior of their unit, but the condo association is responsible for the maintenance of the shared areas like walls, roofs, foundations, elevators, central HVAC boilers, and ground floors. Due to sharing the physical building with hundreds or possibly thousands of other residents, condominium associations provide more intensive care of the building infrastructure.
Condominium Associations vs. HOAs | Side-by-Side Structure Comparison
An HOA vs condo association differs when it comes to what the owner actually owns, where maintenance responsibilities lie, what the monthly HOA fees cover, and what the master insurance policy covers. While homeowners associations handle maintenance of common ground and outdoor spaces, condo associations handle maintenance of the complete building exterior and foundation.
HOAs and condo associations differ in many ways which can help guide homeowners and board members when handling real-life scenarios. Below is a table that highlights some of the biggest differences between HOAs and condo associations. Keep reading to dive deeper into each section for more detailed information.
| Homeowners Association | Condominium Association | |
|---|---|---|
| Real Property Title | The individual owns the physical home, lot, and building frame. | The individual owns the interior of their unit. The physical building is owned by all unit owners together. |
| Building Upkeep | Upkeep to the outside of the house is the homeowners responsibility (roof, siding, foundation, yard, etc.). | Maintenance to the exterior building walls, hallways, foundation, roof, elevators, and HVAC are handled by the condo association. |
| Common Grounds Ownership | Owned by the HOA as their own piece of real estate. | Owned by all unit owners together. |
| Master Insurance Policy | covers common amenities such as clubhouse, pool buildings, and common green spaces. | Covers physical buildings, outdoor walls, elevators, roof, etc. |
| Maintenance Fees | HOA fees are lower because they only need to cover amenities, green-spaces, and home owner landscaping. | condo associations have higher fees because they also need to cover heavy maintenance and reserves for the physical building. |
Ownership Differences | HOA vs Condo Association
Perhaps the biggest difference between homeowners associations and condo associations is real estate titles. An HOA member owns their home and the land it sits on. However, a condo owner only owns the physical interior of their unit.
The difference between private real property and shared property is what determines what maintenance responsibilities a homeowner or condo owner is responsible for. In an HOA, homeowners own the physical piece of property that their house is located on. All property boundaries are defined by the lot that the homeowners association laid out during development. As the homeowner is solely responsible for what occurs on their piece of land, they are responsible for taking care of the land.
If a tree falls on the home or the foundation begins to sink, it is up to that individual homeowner to resolve these concerns. With condominium structures, things work a little differently.
While homeowners own the physical structure and land it sits on in fee-simple, condo owners are only responsible for their unit interior. Everything else is shared with the rest of the unit owners as co-owners.
Because condo owners are responsible for the inside of their unit, the condo association is responsible for the structure as a whole. If the roof begins to leak, the condo association fixes it. Since there are multiple owners involved with maintaining the physical structure, condominium associations require larger fees to support maintenance, repairs, and reserves for major repairs.
Maintenance Responsibilities | HOA vs Condo Association
Another huge difference between a condominium association and HOA is maintenance responsibilities. With HOAs, maintenance is limited to outdoor spaces and amenities. Condo associations require strict maintenance of the complete building due to sharing everything vertically and horizontally with other unit owners.
If you own a home inside of an HOA, you are responsible for the upkeep to your house. From painting the outside of your home to mowing your lawn, homeowners get to decide how they maintain their house. HOA maintenance typically includes landscapers for common green spaces, pool cleaners, and maintenance workers for community entryways and common facilities.
As we mentioned before, condos share everything. Maintenance responsibilities fall under the condo association’s responsibility. From fixing a broken boiler to painting exterior building walls, condo associations must schedule annual maintenance and repairs to the building’s structural integrity. If you want to learn more about maintenance differences, check out Managing Your HOA Reserve Funds. This article breaks down how condominium associations and HOAs budget for repairs and big ticket items.
Fees & Dues | HOAs vs Condo Associations
Let’s Break it Down: Monthly homeowners association fees and condo association fees will differ because of maintenance responsibilities. Condo associations have to spend more money to maintain the building, pay for utilities, and have a larger master insurance policy.
Homeowners associations and condo associations both collect monthly fees from homeowners to support operating costs. What those costs go toward are different for each community type.
HOA fees will generally be less than condo association fees. Since condo associations have more responsibilities, monthly condo fees will be higher.
Typical HOA Fees Include:
- Landscaping for common green spaces
- Pool Cleaning
- HOA Manager
- Community Entryways & Maintenance
- Administrative Costs
- Reserve Funding
Typical Condominium Association Fees Include:
- Structural Maintenance
- Building Paint Job
- Roof Maintenance
- Elevator Maintenance
- Reserve Funding
- Trash Removal
- Utilities
- Master Insurance
- Common Area Maintenance
True or False Knowledge Check
True or False? If a tree falls on a house located inside of an HOA, the homeowner is responsible for tree removal.
False. If tree damage occurs to a home in an HOA, the homeowner’s insurance would cover removal costs.
True or False: If a refrigerator leaks on the inside of a condo located in a condominium association, Condo Association X is responsible for drying everything out.
False. Condo owners should purchase renters insurance to cover their belongings. However, if that leak spreads to other apartments, the condo association would need to handle it.
If the main electric supply suddenly goes out inside of a condominium association, who is responsible for maintenance?
- The electric company
- Each individual condo owner
- Condo Association X
Answer: The Condo Association. Since that electric supply represents part of the common elements, the condo association would be responsible for restoring power.
Insurance Coverage | HOAs vs Condo Associations
Let’s Break it Down: Insurance coverage is another area where HOAs and condo associations differ. Because homeowners own the land that their home is built on, they are required to buy homeowners insurance. Condo owners do not own the physical building, so they do not need to purchase full homeowners insurance policies.
Who pays for what when it comes to insurance? Well, that depends on the community type.
HOAs have a master policy that covers common areas; however, they are recommended to get HO-3 homeowners insurance to cover their house and land. Condo owners purchase an HO-6 insurance policy, but the condo association has a master policy too.
If you own a home in an HOA, you’re going to want homeowners insurance. HO-3 policies cover the physical structure and land that your home is built on. Condo owners do not need to worry about that since they do not own the physical building. Instead, condo owners can purchase what is known as a “walls-in” policy.
Walls-In policies, also known as HO-6 policies, cover belongings that condo owners may have inside their units. Since the condo association already has a master policy, condo owners don’t need as much coverage.
Rules, Enforcement, & Governance | HOAs vs Condos
Let’s Break it Down: Rules differ for each community type because condos require stricter guidelines. With condos, you have to think about your neighbors upstairs and downstairs. Soundproofing, parking restrictions, and lease terms are enforceable in condos because you have dozens, if not hundreds, of neighbors.
Both condominium associations and HOAs have CCRs or Rules that govern their community. Condo associations focus on details like parking restrictions, quiet hours, pet sizes, and anything that can cause damage to shared walls.
HOAs focus more on what each homeowner does on their own land. Painting your home, watering your lawn, and building a fence all require HOA approval first.
Which Community Association Requires More Work? | HOA vs Condos
Condo associations require a lot more work compared to HOAs. From maintaining the structural integrity of the building to stricter enforcement of rules, condos require intensive management.
Managing a condo association is not for everyone. Sure, HOAs require an elected board to manage the community, but condo associations require continuous physical monitoring. Since condos share everything, if there is a problem in one unit, it can affect everyone else. Think about having a broken boiler in the middle of winter; every resident is affected.
Not only do condominium associations require more hands-on care of the physical property and maintenance, but condos also have more resident interactions. Condo residents have to interact with their neighbors daily. They have to inquire about parking, pets, noise, and guests. This requires clearer communication channels to stay professionally organized.
Benefits of Professional Community Association Management | HOAs & Condos
Let’s Break it Down: Whether you’re running a condominium association or homeowners association, hiring a community association management firm can benefit your community. From navigating Texas Property Code compliance to preserving reserve funds, SBB Community Management can help.
Condo associations and HOAs require extensive knowledge of the Texas Property Code. Our state changes voting processes to require associations to offer electronic voting, improves the definition of what constitutes a financial interest in vendors, and tightens architectural standards. It’s hard for volunteer boards to keep up with all of these changes.
Partner with SBB Community Management | HOAs and Condos
HOAs and condo associations need special care when it comes to management. SBB Community Management can help you with both condo association management and HOA management. Located in both the DFW and Houston areas, we specialize in working with high-rise condos. Our team will help you improve operational efficiencies, boost resident satisfaction, and keep your board members on track to success.
We work with a small, hand-picked selection of communities so you know that our account managers care about your community as much as you do. Our local Texas Property Code know-how paired with comprehensive digital portal tools and personable communication skyrocket your community’s productivity. Let SBB Community Management take the stress off your board. Fill out the form to the right to see how we can help manage your association.
Frequently Asked Questions
Are condo associations and HOAs the same thing?
No, condo associations and HOAs are different. While condos enforce rules and collect dues, HOAs are planned communities made up of single-detached homes. Condo owners own their condo unit’s interior, but they do not own the physical building and land it sits on.
Do condo associations have HOA fees?
Condo associations do collect monthly association dues from condo owners. Dues are commonly referred to as HOA fees or condo fees. These monthly payments go towards maintaining the building, exterior repairs, elevator repairs, trash removal, utilities, master insurance policy, and reserves.
Who owns the common areas in a condo?
Condo associations own common areas just like HOAs. However, the physical condo association or management firm does not own the land. Each condo owner owns an “undivided interest” in common elements. Since every unit owner is a co-owner of the building, common areas are divided.
Which requires more maintenance, an HOA or a condo association?
Condo associations have more responsibilities when it comes to maintenance. Unlike HOAs, condo associations must maintain the physical building structure, exterior building, shared roof, central boilers, fire systems, and elevators.
